Tax-Loss Harvesting
Selling losing positions to realize losses that offset gains, reducing your tax bill — with crypto-specific quirks.
Tax-loss harvesting is the practice of intentionally selling assets at a loss to realize a capital loss, which can offset capital gains (and sometimes ordinary income) to lower your tax bill. It’s a standard portfolio-management technique, and crypto’s volatility creates frequent opportunities.
Crypto has a notable quirk: in some jurisdictions, the “wash sale” rule that blocks stocks from being immediately repurchased after a harvested loss has not clearly applied to crypto — potentially allowing sell-and-rebuy strategies that aren’t permitted for stocks, though regulators have moved to close this gap. Rules vary widely and are changing, so this is educational, not tax advice. As with all crypto tax matters, accurate cost-basis records and professional guidance for your jurisdiction are essential.